Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![This year, Sigma Incorporated generated $662,250 income from its routine business operations. In addition, the
corporation sold the following assets, all of which were held for more than 12 months:
Marketable securities
Production equipment
Business realty:
Land
Building
Accumulated
Initial Basis Depreciation*
$ 149,600
103,600
Required A Required B
237,000
270,000
$0
82,880
Taxable income
81,000
*Through date of sale.
Required:
a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the
building and has no nonrecaptured Section 1231 losses.
b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
Sale Price
$ 75,000
41,750
Complete this question by entering your answers in the tabs below.
247,250
210,500
Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and
has no nonrecaptured Section 1231 losses.
< Required A
Required B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4067f54e-ec18-4a6a-86e1-5d5d5d45d59c%2F59ce17bc-9657-4d38-bc1c-85f6bd278439%2Fi88uwz_processed.png&w=3840&q=75)
Transcribed Image Text:This year, Sigma Incorporated generated $662,250 income from its routine business operations. In addition, the
corporation sold the following assets, all of which were held for more than 12 months:
Marketable securities
Production equipment
Business realty:
Land
Building
Accumulated
Initial Basis Depreciation*
$ 149,600
103,600
Required A Required B
237,000
270,000
$0
82,880
Taxable income
81,000
*Through date of sale.
Required:
a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the
building and has no nonrecaptured Section 1231 losses.
b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
Sale Price
$ 75,000
41,750
Complete this question by entering your answers in the tabs below.
247,250
210,500
Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and
has no nonrecaptured Section 1231 losses.
< Required A
Required B >
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